Via TD Thornton
The same day that the federal judge overseeing Ahmed Zayat’s two intertwined bankruptcies ordered a 13th consecutive extension of time for the trustee, who was researching Zayat’s financial stability, to file. complaints against the solvency of any debt, the mortgage servicer on Zayat’s $3.5 million New Jersey home on Friday filed a petition separately ask the court to cancel the automatic right to stay on the property.
Such a request, if approved at the February 1 hearing, could pave the way for the financial institution to begin foreclosure proceedings against Zayat.
Citing a $1.86 million outstanding balance on the loan plus a total of $2.91 million owed, attorneys for Fay Servicing, LLC, wrote in a Jan. 7 petition in Court. Bankruptcy of the United States (County of New Jersey) that “it is clear that the debtor lacks any equity in the subject property [and] the debtor has failed to show any proof that the assets need to be reorganized under the Bankruptcy code. ”
The filing of a special request for relief “including, but not limited to, authorization [Fay] enforce its measures for coercion and possession of the Property. ”
In an unusually long 16-month federal court case, the owner and rancher of the Triple Crown champion American pharoah is looking for a legal settlement to get out of debt under $19 million.
Many of those creditors are Zayat’s former thoroughbred trainers, along with numerous breeding, boarding, equine transport and veterinary organizations.
When Zayat first filed for Chapter 7 bankruptcy protection on September 8, 2020, he wrote in court documents that he owned only $300 in cash and $14.22 in cash. two checking accounts.
However, he and his wife continue to own and live in a 7,714 square foot home in Teaneck, New Jersey.
Six days after Zayat filed his personal bankruptcy petition, Zayat’s former financial advisor and several other organizations initiated a separate “involuntary bankruptcy” petition against the family-owned racing company. owned by the Zayat family.
Involuntary bankruptcy proceedings, although relatively common in U.S. courts, are designed to protect creditors, not debtors, and are often filed against corporations (as opposed to corporations). personal) as an attempt to get paid when it is believed that a company is rapidly burning through assets and/or of alleged financial disadvantage.
Donald Biase, who was tasked by the court to find out if Zayat was telling the truth about his alleged poverty in his personal bankruptcy petition, has repeatedly told the judge in the case that Zayat and members of his family refused his legal cooperation. trying to track down millions of dollars in potentially fraudulent transfers.
In July, Biase wrote in a court application aimed at uncovering concealed assets that “Documents obtained by the trustee from third parties strongly suggest that the Debtor still possesses the owns substantial assets in Egypt.”
Zayat has repeatedly denied that he was involved in any illegal activities or that he was hiding money. He also stressed that neither he nor his family members tried to interfere with the work of either trustee, who was appointed to check on his personal finances and business operations. .
In addition to not being granted Chapter 7 bankruptcy protection by a court if he is dishonest, Zayat could face a federal investigation and/or charges if the U.S. Department of Justice believes the criminal has committed a crime. be done.
